■ In this PharmaValues 2021 report, we use valuation and six strategic metrics to ‘force rank’ 49 global biopharma companies. Combined, these companies have $3,650bn market cap, 2020E Pharma sales of $650bn, and $147bn of annual pharma R&D spend.

PharmaValues is our proprietary valuation tool for the Pharma and Biotech industry. It offers a product-by-product valuation based on NPV over the lifecycle of each drug. The long-term record of picking Major Pharma and Japanese stocks based on an EV/NPV strategy is strong, with a 10-year market-neutral return of 96%.

■ Key industry takeaways for 2021: 1) Global Major Pharma valuation on EV/NPV is in line with historical averages following a small derating in 2020 likely driven by investor uncertainty on US healthcare reforms. 2) EU Major Pharma continues to screen as more attractive on EV/NPV versus US peers, whilst trading on similar PEs. This likely reflects the larger patent cliff for US Majors building from 2022. 3) 2021 looks to be a strong year for the pipeline to be de-risked with the value of pivotal blockbuster readouts rebounding significantly for EU Major Pharma. P3 readouts continue the trend towards reduced innovation with a focus on line extensions for existing drugs.

■ Major Pharma: Within Europe, AstraZeneca scores the highest on overall Strategic Score in our PharmaValues 2021 analysis, with Bayer and Novo Nordisk scoring the lowest.

Based solely on PharmaValues EV/NPV valuation, Sanofi is the clear leader.

■ Specialty Pharma: Almirall and Merck KGaA score the highest, with Orion, UCB and Recordati scoring lowest. Biotech: Incyte scores the highest, with Amgen scoring lowest.

Japan Eisai and K Kirin score the highest, with D.Sumitomo and Taisho scoring lowest ■ For access to our updated PharmaValues website where you can view details of forecasts underpinning this analysis, please contact your Credit Suisse representative.